Discovery Beats on Earnings in Quarter Ahead of Discovery+ Launch

Streaming service debuted on Jan. 4, 2021

Last Updated: February 22, 2021 @ 6:10 AM

Discovery, Inc. reported a successful fourth quarter 2020 — in terms of Wall Street’s expectations, at least — on Monday morning. Last year’s Q4 was the final 90-day period before the “90 Day Fiancé”-heavy streaming service Discovery+ was launched on Jan. 4, 2021.

Wall Street had forecast earnings per share (EPS) of 72 cents on $2.83 billion in revenue, according to a consensus forecast compiled by Yahoo Finance. Discovery actually reported adjusted EPS of 76 cents on $2.886 billion in revenue. Net income was $271 million.

Discovery’s Q4 revenue was flat with the same quarter in 2019. U.S. ad sales were also flat as distribution revenues rose 5% — the latter despite cord-cutting at the linear cable channels. Internationally, both figures were down a bit.

Expenses increased over the final three months of 2020 — especially overseas.

Discovery President and CEO David Zaslav said the following in a prepared statement: “2020 was a year of change, challenge, and opportunity, and our company has shown incredible resilience, creativity and focus as one global team. We finished with strong operating momentum and great command and control across our global businesses, uniquely positioning us to balance our core and next generation businesses.”

“We are off to a promising start in 2021 with the successful launch of discovery+. We have now surpassed 11 million total paying direct-to-consumer subscribers globally and are on pace to be at 12 million by the end of the month, underscoring the value of the investments we’ve made in content, beloved personalities and brands with huge consumer appeal, supported by industry-leading DTC capabilities,” he continued. “Our unmatched global scale and ability to serve consumers everywhere with a truly differentiated offering across platforms, as well as our robust cash flows, even amidst the significant investments in our next generation initiatives and the ongoing COVID-19 pandemic, position us to achieve sustainable long-term growth and drive long-term shareholder value.”

Following the successful debut of Discovery+, Discovery and Chip and Joanna Gaines’ Magnolia app is set to launch this summer. In January 2022, cable channel DIY Network will rebrand as Magnolia Network.

Discovery stock (DISCA) closed Friday at $50.79 per share. The markets reopen at 9:30 a.m. ET.

Zaslav and his fellow Discovery executives will host a conference call at 8 a.m. ET to discuss the quarter and full year in greater detail.